(Adds ADP statement)
By Svea Herbst-Bayliss and Scott Malone
BOSTON, Oct 25 (Reuters) - Billionaire investor William Ackman on Wednesday said that Automatic Data Processing Inc will probably employ more people if management listens to his plans for beefing up the company's earnings and product offerings.
In an interview with Reuters, the hedge fund manager laid out his plans for improvement at the human resources software provider, which he called "great" but in need of some help after years of flying under the radar of investors and analysts.
"My guess is that ADP will employ more people with us on the board within five years than it will with the current board situation," Ackman said.
A week ago ADP Chief Executive Officer Carlos Rodriguez told Reuters that Ackman's aggressive plans for margin improvements could lead to massive layoffs. As much as 30 percent of the company's 58,000 employees would have to go, he said.
ADP said Ackman's claims are disingenuous.
"Considering that most of ADP’s costs are expenses related to the people it employs, it is mathematically impossible to achieve the margin increase Pershing Square seeks without massive headcount reductions,” the company said.
The hedge fund manager is vying to put three people, including himself onto the board at the Nov. 7 annual meeting, something the company is opposed to.
Ackman said he wants to reserve judgment on whether Rodriguez is right for the top job and to sit down with management after getting on the board.
Three proxy advising firms have recommended that shareholders put Ackman on the board. Glass Lewis and Egan-Jones recommended that the other two director candidates, Veronica Hagen and Paul Unruh, also be elected.
As both sides make a final push to line up support, issues like jobs are seen to appeal to many voters. Main Street investors own 28 percent of ADP.
"This is not a situation where you go in there and you fire a bunch of people to improve the margins," Ackman said in the interview. "That's not our approach and we don’t like situations like that."
The biggest danger to jobs is big clients defecting to rivals like Ceridian and Workday Inc, said Ackman, whose Pershing Square hedge fund also owned shares of ADP between 2009 and 2011.
Reporting by Svea Herbst-Bayliss and Scott Malone; Editing by Lauren Tara LaCapra and Lisa Shumaker